PANAMA STRONGMAN SAID TO TRADE IN DRUGS, ARMS AND ILLICIT MONEY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90B01390R000100070024-6
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 6
• Document Creation Date: December 22, 2016
• Document Release Date: November 6, 2012
• Sequence Number: 24
• Publication Date: June 13, 1986
• Content Type: MEMO

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Panama Strongman Said to Ti+ude
In Drugs, Arms and Illicit Mq~ey
U.S. Aides Also Assert
Noriiega Helps Leftist
Rebels in Colombia
Dy SEYMOUIt 1M. HERSH
lp~tlN b 71t Nor YaA 71st
WASHINGTON, June 11-The army
commander d Panama. a country
WW to UNted States interests in Latin
America, is extenalvely involved !n il-
Udt matey laundering std drug activi-
tiesand has prtSvided a Latin American
guerrilla group with arms, according
to evidence collected by American in-
telligence agenda.
SeNor state Department, white
House. Pentagon and inteWgence offl-
cialssaid the evidence also showed that
the cotnmattder, Gen. Manuel Antonio
Noriega, who is in effect the leader of
the country, had been tied to the killing
of a political opponent. They also Baia
that for the last 15 years, he had been
providing intelligence information si-
multaneously to Cuba and the United
States.
In addltion, they said, General
Noriega is a secret investor in Pana-
manian export companies that sell re-
stricted American technology to Cuba
and Eastern Eutvpean countries.
Espionage Investlgatioo in 7Vs
In the tnid-1970's; according to for-
Geu. Manue! Antonio Norie;a w
Panama at a retxpw yesterday
at Fort McNalr near Washiogtaa.
a private ceremony at the Inter-Amer-
it:an Defense Board. Requests to inter-
view the general iA Washington re-
ceived no response.
In Panama last weeltead. General
Noriega could not be interviewed to dis-
was the Americans' assertions desplu
three days of telephone calls to the
army pros office and attempts W
reach him through other senior army
officers.
Spokatman Denla Assertloos
The general, said Capt. Eduardo E.
Lim Yueng, the secotd in command d
the Panama Defense Force press of-
fice, was too busy with other important
business. Two days of telepborte calls,
including several written messages left
with secretaries, brought ra reply from
the presidential press office.
Captain Lim Yueng, however. denied
the assertions as a spokesman for the
"institution of the armed forces and for
General Noriega." He said Gerte:al
Nocie~a am the mwucl, were w ~
rims d a campaign of slander wt had
m bade is tact.
"7base are political attacks." he
said. "General Nariega wauW aaswrer
the same way. 'ibis campaigt, V trying
to damage our hutltutiat."
A White House oMcial Bald the intel-
llg'enx Wor'rnatiort about General
Nor'Np's aWvities had been made
available oo senior ottidals d the
White Horse. But this ottldal and
others said they aid not know whether
Praida,t Reagan was aware of the re-
porb.
A setdor Reagan Administration otff-
cW would not discuss the assertlocts
agairat General Mort~egaa. who was
Previously bead d mWtary intelli-
genoe and became army commander
when Brig. Gw. Omar Torrlias Her-
tYra was kUled in a heUoopter crash in
ililli. The Administraton oMdal ert-
pratsed omcern wt the intelligencx
inforntatioo would damage relations
with Panama u it was seat as reflect-
k8 the views d the Whin House.
Otfldah f4 rite Reagan Administra-
tion and past Admlttistratloos said k
interviews that they had overlooked
General Noriega's illegal activities be-
cause othis oooperatim with American
inteUigeatx and his willingness to per-
mit the American military ezten9ive
leeway to operate in Panama.
They said, for example, that General
Noriega had been a valuable asset w
Washington >n cottntertng insurgencies
in Central America and was raw coop-
erating with the Central Intelligatce
Agency in providing sensitive intorma-
tlao from Nicaragua.
But many Reagan Administration ot-
fldala made clear in interviews that
the a:tent o[ Geaetal Noriega's activi-
tles was seen as a potential national se-
curity threat because of the strategic
importance of Pattaaia and the
Panama Canal. Under trestles negoti-
ated wiW General Totzijos is the
1970's, the United States has agreed to
turn the canal over to Panama is the
Year 2000.
"It's precisely because we have long-
term strategic interests in Panama,
with the anal, that it's important to
have tellable people we can deal with,"
a satior American diplomat said. In
addition, Panama has become increas-
ingly important for the United states
sad its monitoring of ittsttrgencies in
Central America.
met officials of the National Security
Agency, General Noriega aas impli-
cated in a secret espionage investlga-
tion involving the transfer of highly
sensitive agency materials to Havana.
These officials said General Noriega
purchased the N.S.A. documents from
a United States Army sergeant on duty
in Panama.
A White House official, discussing
General Noriega's role in what rte de-
picted as the "Panamanian connec-
tion," said curtailing the general's aF
tivities would play an enormous role in
stopping the international trafficking
of drugs by organized crime.
The head of the Panamanian miU-
tary, called the Panama Defense
Force, is widely viewed as the politi-
cally dominant force in the country.
General Noriega is on a visit to the
United States this week and presented
a Panamanian medal of honor today at
General's Activities:
`Legal and Illegal'
A receat'classified report by the De-
fense Intelligence Agency concludes
wt General Norie~a, operating
~tlbnuc~C
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lhratyh a am.u cram a< coP a,.od.d.
is ebe taiMtary, aodrtsaies tlsist omtrd
>tfaa sores:. ni.
klWee~ ooewnd a fwr wtssb belbn
Geosea! Norlega ousted else d.ftda
Pnsidaot. NioolL Ardlen Harwtta,.
woo was about to same ao iavastlga`
ammissioa
. Harl.cta wad replaced by 18r'k
Arturo DelvalN, who r .kwed b7
a
De~eaie Farce, according m nos Amsr-
iaa o[Hcial. The study saW the gsoarai
a bustnasa.inwlved io kpl sad wa.
the lnstrvctions. order a~od~oonsen~t d~ ~
Naiega," lira ofAcial said.
whi"~'~io ~Suug~u ~ ~.
genoe sources, there has been lo~g~
otfi ~ Nor epL ;~a~
sea. Including his relations wits the
Cuban Government and his wililogrress
W sell arms Lo the M-19 rebel grattp m
Colombia.
The goal d M-19, which is pro~Cuban,
b to wertlrrow the democratically ~
elected Governrneat. Over the Years,
the
ble for vtoient a~tiapcks tisat have
hundreds of deaths.
Ot the assertion an the M-l9 guerril?
W. GPI I.lm Yueng, the Panama.
Nan Army ~1~aman, said: "we have
m fntormatian ao M-19. We do all we
can to avoid Panama being used a a
trampoline for urrorfsm."
The captain also delved any Cuban
intelligence efforts in Panama or that
General Noriega was involved in any
shady activirits with Cuba. He also
delved any ezport of embargoed goods ,
to Cuba. "Cuba has an embassy here
and normal relations with us like many
countries,.. the captain said.
He added, "We've captured drugs
here, and are doing our best to collabo-
rate with the UNted states to tight ear.
cotrattic in Panama...
`A Critical Misjudgment'
In Killing of a Critic
What has Donne to be sees within the
United State GovBrnraeot as the
Noriega problem was hNghtened by re-
cent intelligence directly tying the gen.
oral and the top leadership of the
Panama Defense Force to the slayyiinngg
last September of Dr. Hugo Spadafon,
ace of the army's leading critics.
In his sutemaat, Captain Lim Ytreng
said: "There is abeoluWy nothing in
this case involving the army. Spada-
tore had many enemies. The institution i
of the armed forces absolutelyy denies I
any ties to the death of Spadatora. We i
criridze this [.rime."
A classified Defense Intelligence
ABBY r'ePort an General Noriega de-
scribed his involvement in the killing
as "a Critical mis jtdgmem" OII his
part. The D.I.A. is also known to have
intelligence demonstrating that Goo-
enl Noriega ordered the killittg, as
cording to an otfidal with first-hand lo-
formation.
Dr. Spadafon's decapitated body
was found slotted in a United States
mailbag in Costa Rica just across the
Amerlcaa odldab as aootMr nomlaai
leader, wills the oornmaadsr a~
ttiaily in omanl of tlya co,mtr,,.
Some sealor White Hates offidaU
have privately hem ooocerned about
Ceoeral Norlep's activities. Late last
year vice Adm. Jobe M. Pdadascer,
then the [rawly appolated natloaat se-
curity adviser, vWted the general sad
lge said Geosral Ptaclaga's aaos ap
peand "own and wen" d aosnectia~
with spedtk dates. Places and ooataees
m marry-laundering and mvg t~ivf-
tles.
Much d the laforaoatioo, the sotnsa
adv,owledged. has been gleaned dvm
Natiaoal Seauity Agesrcy ioteraPts,
among the mat highly ciassitled iator-
mation mthe covernmeat.
In interviews, inuiligeooe offidab
repeatedly described General Norkp
as brllliaot is masons mucd d iris ~dli--
rect involvement. Preferring to operate
thevtrgh ctuotus or as a secret partner
Paaamaaiarr ~~ compaNs sad
privauly told him to "ctrl i< nut" . ay. ~
ludin~ to~the dnr~ am moony lauMsr- i Ao American ot[IcW with Iarg e:-
otfidal. to a Goveramoot
Admiral Poindexter was later quoted
as having raised questions about as ai-
ternadve to the Panamanian gerrenl.
The issue is a chronic erne for Amer-
ican polity makers: how far w over.
look corruption aM a lad[ d demo-
craric principles in aWea in order to
protect secret intelligence insWla-
sons.
Senior dvilian ottidals in the pinta.
gon, headed by Nestor D. Sancbes, a
former C.I.A. am Whin House aide for
Latin American issues who L a Deputy
Assistant Secretary o[ Defense for
Inter?American Affairs, are known W
be ooexxrned flat any succeasoc w
General Noriega might not be willing
to tolerate the American military era`
riviries that now exist in Panama.
In Panama, a Web
Of U.S. Intelligence
Since the early 1980': the Natbnal
Security A8~Y, ~~ wrottgh Its
mwtary components io the Army. the
Navy and the Air Farce, has vastly in-
creased its intelligence-gatherins as
rivlries is Panarrra. it is naw capable of
moNtoring all of Cemral Amelia and
mast of South Amerip from its Pana-
maNaa irsatalladaos.
The Central Intelligence Agency has
also used military bases in Panama,
PClty~asa jnmP~B~ Point
for inteplgence gathering and for
agent' seat W Nicaragua according to
inteWgenoe otfidaL.
In interviews, Reagan Administh-
tion officials emphasized the nature of
the evidence tying General Noriega
and the top leadership of the Panama
Defersse Force to many-laundering
and drug trafficking adiviries.
One oftidal who said be had ezte~
sively reviewed the most sensitive ia-
telligenee available to the American
Government on General Noriega, in-
cluding reports from agents and inter-
cepts. described most of the spedfip
as ' having to do with gun and drug run-
~g ,.
that the geaerai seemed m lave De-
oome wort! dtCUmspect in h~ pattern
of activity in the early 1980's, moderat-
ing overt support for M-19 and direct
financial involverrreat In drug adivi-
tiee.
Instead, the otfidal said. the seneral
mate basineas ventures and Detains
more imotved is what were described
as safer sad Wore lucrative activities
- money laundering, much d it, as
cording W American law entor'cernent
entice, known to be
a~dditiaa, the olfidal s d~ has also
become involved in the shipping of
high-technology American goods.
much of them on restricted lists, from
duty-tree zones in Panama to Cuba and
,countries in Easurn Europe,
Colombian Rebels
And the Panamanians
~d re is eviety~inhg
deaWtg to M-19, the Colombian rebel
~Su h shipments dwindledm the last
few years, otfidals said, appareatty in
to Pr'~+re from the Reagan
Administration. but have begun to flow
again. General Noriega's M-19 trafflck?
ing "continues today," said an official.
with access w the most current intelli-
gence.
The mast specific details of General
Noriega'a involvement with M-19 were
provided by C.I.A. otfidals. In Doe in-
stance. carefully maNWred by the
agency. General Noriega and mem-
bers of the Panama Defense Fora
Wert found to have armed a small M-191
band -estimates range from 80 to,
more than 100 - before en u~,aM.~.._
tul attact ao Colombia's west coot in
early 1982.
Members of the M-19 group. which
had been trained in Cuba. were tacked
by American intelligence as they left
Havana std flew to Panama, accord-
ing to touiligence offidals. They said
the rebels were then armed b9 mem-
bers of the Panama Defense Force and
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sdgptl DF a botbeat~ ed ossral. tens Paeaeoa >sq ~
to two bcatleas aQ the oust d Colom-
bia.
The gtaerrilla bands were aventt~r
? found am attacked by coiombian oee-
daL, with heavy loss d life, aooord4rg
to Intelligeooe a[ecials. Diaries were
seised in which the reendts taw d their
tralydc~g io Rousso and their stay m
Panama. locludtng an ossrnialtt stay m
a afabouae that was said to have been
provided by members of the Patraraa
Defense Force.
other American inulUgeace o[tidab
tow d viewing reeosmaiaaanos elm, I
believed oo have been ukea by a bigit- .
Ayimg U~. ~~ M-lf air+crah oft
i lording drugs at a Panamanian Alr Da
tense Force airstrip. Arms were said to
'have been loaded into the craft for its
return to Colombia.
'ibrougb his legal and 1Uega1 acxivi-'
ties. Americas officials acid, General
Noriep has amassed an enormous per-
sosral tortuae, much of wWch is ba i
Ueved to be deposited in European
barb. He b reported to own at least
two homes in Panama City aM one is
southern Franca. As army command-
er, oftlciaL acid. General Noriega
earns a salary of i1,Z00 a month.
General Noriega is also reported to.
have a substantial inureat in a bank in
the Coldr, Panama, Free Zone. which
American oMdals said is heavily lo-
volved in laundering money for the
M-19 as well as for narcotics dealers.
Laundering Money
And Shipping Drugs
According to a 1985 assessment of
"U.S. Narcotics Control Programs
Overseas," published by the House
Foreign Affairs Committee, Panama is
regarded by American law enforces
mast officials as a "drug and chemical
transshipment point and money-loam.
tiering tatter for drug money."
Panama's banking laws are among
the moat stringent in the world, permit-
ting secret accounts by individuals and
corporations flat are virtually tree
nom scrutiny by American law so-
forcemeat officials. Additionally,
Panama's corporation laws allow oom-
paNes to be organized with no public
disclaaure of prindpals. As a result,
Panama has become a world Leader in
the depositing of illegal profits from
drug dealing and other activities.
Cash om deposit at a Panamanian
bank can simply be sent by wire to
banks in the United States or else-
where. part of the process known as
money laundering, in which the ulti-
mate source of the money is disguised
through a series of transactions.
A Whin House official said the moat
significant drug-running in Panama
was being directed by General Norio
a
.:Doing away with the Panamanian
connection - in fire saLSe that General
Noriega condoned and protects such
activity -would put one hell of a dent
i? t>se marma^t d drttp m oeptrised .
Cf1ml." td N1dh l3ottse Otlicial la1d.
"'fi'at's the bottom Mna.??
la the recant intmiews, Admtrtistra-
tian aflldals depicted General Nona
p's cvr'reat drag Aroctian as that of a
"tadlitator." 'Ib o[t'kiala tired iatelll.
geode ~v showing that be b a sa
cret hnveetor in companies oontroUed
b7- a Panamanian businessman and is
tavolved m a serlas aR trail-
A former Whin Aouse aide depicted
General Noriega's rok as being to "ta-
dllau the shipments and paY ~ PaY-
ofb."
The former aide added: "Notiega
doesn't carry the stuff around. They
PaY him a Percentage for protection d
the ttaMc."
General Noriega'a involvement in
money laundering was similarly da i
scribed by American inulligerrtx and ,
dipbmatic otfidals as a behind.tlfe.
scenes rote, with privau export oom-
padee acting as his agent.
Offidals said the United States had
intelligence showing that in the early
1960's General NorieRa held a major
financial inurest in an opium-procea~.,
ing plant that was discovered, accord-.
ing to a House Foreign Affairs Commit-~
tce investigation in 1965, in operation
along the Panamanian-Colombian bor-
der.
The Congressional report noted that
the laboratory was apparently fi-
nanced by Colombians along with a
senior member of the Panama Defense
Fora whom it identified as a Colonel
Meld.
The colonel and others were arrested
by the Panama Defense Force, the re-
port noted, but "none was prosecuted
due to'lack of evidence.' " Administra-
lion officials said that despite the otfi-
cxr's arrest and dismissal from the
military by General Noriega, he was
still Uving opeNy in Panama City.
C1~stoms officials have filed many
criminal indiMments in which the role
o[ members of the Panama Deten4e
Fortx was prominent.~In one case, in-
volving aprivate Panamanian trdght
carrier, Inair Cargo Airlines, aFed-
eralgrand jury returned an indictment
charging conspiracy to move "multl-
million~ollar shipmenu" of cash to
Panama.
According to American ottidals,
there is evidartx tying General
Noriega aril members of the Defense
Force to a financial involvement in a
small airline charter company that, op-
erating out of the main airport in
Panama City, flies weekly money-laun-
deringmissions in and out of the United
States. The aircrah is met in Panama
by an armored tnrdt.
Noriega Reported
Linked to a Killing
According to American officials, the
Defense IateWgeacx Agency has un-
' covered evidence linking General
Noriega to the slaying of Dr. Spadato-
ra.
Ganees~ Nosia~a br tspeated t~
1~qf dssiait d iordvement !a ed IdD-
Ooe tl-Wa Hausa oeldal who has as
cos to die Government's intelligence
repoRS said "there is rw doubt' that
aced r pNalega was direaltly~ impU-
Mot>tsr dricial~satfd tbedintelligence
??~ k uP to him" -Genera!
idard tine ..~ the ?'igir"cor of the
d it."There is ao
evideaoe, the ofe addeed. that Gen-
the ac v1~toRyre and slayy~l!nns~ of Dr.
Spadafora, who was beheaded
Geoerat Nariega b mown, according
to hidd~ setWttve American Wtelli-
genoe fadosrmaUan, to have told "sev-
eral aides io pion days that 'i want
that gyre bead,... the ottlcial said.
tinaiao intNligence ofedab hs ,
Panama are kmown to have reviewed .
the PanamaNan medical reports o0
the slaytog and oonermed, the official
added, that Dr. Spadafora was tortured
four to siz hours while alive.
Another Ameriga oelcial, who was
in Central Amerka at the time of the
~' alay~, similarly declared that tho'
tinted States ">